On-chain data and market analytics firm CryptoQuant argued that the strategy, led by Michael Saylor, should temporarily suspend its Bitcoin purchases and focus on replenishing its dwindling cash reserves. A report released by the company’s research director, Julio Moreno, said that increasing dividend obligations, decreasing cash flow, and increasing unrealized losses in Bitcoin pose risks to investors.
According to the report, Strategy’s preferred stock, STRC, fell to $82.50 last week, falling 17.5 percent below its par value of $100. Moreno said the decline was due to bear market pressure on Bitcoin coupled with a sharp decline in the company’s cash reserves.
The analysis highlighted that the strategy recently repurchased $1.5 billion worth of zero-rate convertible bonds due 2029, reducing its cash cushion that could be used to support dividend payments. He noted that the company’s cash reserves have declined by approximately 38% since the start of 2026.
On the other hand, it was noted that the strategy’s annual dividend obligations increased rapidly due to issuing more STRC to fund its Bitcoin purchases. The annual dividend obligation, which stood at around $300 million at the start of the year, has now reached $1.2 billion, a nearly four-fold increase in less than six months.
According to Moreno, the company’s ability to pay dividends has also weakened significantly. While it had cash reserves spanning more than seven years at the start of the year, that period is now reduced to just 14 months. The strategy is estimated to need to increase its cash reserves to around $2.8 billion to support the current dividend burden.
CryptoQuant also said that selling Bitcoin at current price levels would not be a wise move for the company. According to the report, the strategy is seeing approximately $10.6 billion in unrealized losses on its Bitcoin positions, and all purchases made in 2024, 2025, and 2026 are currently in the loss zone.
Moreno suggested that in order to regain investor confidence, the company should first stop Bitcoin purchases, develop a more systematic purchasing strategy, and create a framework to strengthen its cash reserves by making profits in future bull markets. These measures are seen as improving the long-term financial resilience of the Strategy.
*This does not constitute investment advice.
